Energy Outlook and Government Policy for Alternative Fuel. CBG as Alternative Fuel for NGV. CBG Project in Remote Area

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2 Energy Outlook and Government Policy for Alternative Fuel CBG as Alternative Fuel for NGV CBG Business Chain CBG Project in Remote Area Conclusion 2

3 Energy Outlook and Government Policy for Alternative Fuel 3

4 Oil & Gas Balance Operational Results Financial Performance Economic & Market Outlook Supply Production Sales Import (80%) 948 KBD Imported Refined Petroleum Products 76 KBD Domestic Crude/ Condensate 872 KBD Total Refining Capacity in Thailand: 1,087 KBD Refined Products 1000 KBD* Indigenous (20%) 238 KBD Crude/ Condensate 211 KBD PTT s Associated Refineries : 910 KBD (TOP, PTTGC, SPRC, IRPC, BCP) Refined Products 208 KBD 859 KBD (**) Export Other Refineries : 177 KBD (ESSO) Crude Export 27 KBD 235 KBD Source: PTIT Remark : (*)Refined product from refineries= 1000 KBD, including domestic supply of LPG from GSPs and Petrochemical Plants = 103 KBD (**) Not included Inventory KBD = Thousand Barrels per day 4

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7 ktoe 25,000 ktoe or 25% replacement of total energy demand in 2021 Source: Department of Alternative Energy Development and Efficiency

8 Committed to the development of low-carbon society Government Funding On R & D Activities Alternative Energy Development Plan (AEDP: ) Private-Led Investment Target 25% of RE in Total Energy Consumption By 2021 Electricity Sector (KTOE) Thermal Sector (KTOE) Transportation Sector (KTOE) Wind Solar Hydro Bio Mass Bio Gas Garb age Solar Bio Mass Bio Gas Garbage Ethanol Biodiesel CBG BHD ,370 KTOE ,800 KTOE ,463 KTOE Source: Department of Alternative Energy Development and Efficiency

9 Biogas (6,867 Ktoe) Electricity Generation Thermal Transportation Target: 2,060 Ktoe Target: 1,000 Ktoe Target: 3,807 ktoe

10 CBG as Alternative Fuel for NGV 10

11 ม.ค. 50 เม.ย. 50 ก.ค. 50 ต.ค. 50 ม.ค. 51 เม.ย. 51 ก.ค. 51 ต.ค. 51 ม.ค.52 เม.ย.52 ก.ค. 52 ต.ค. 52 ม.ค. 53 เม.ย. 53 ก.ค. 53 ต.ค. 53 ม.ค. 54 เม.ย. 54 ก.ค.-54 ต.ค.-54 ม.ค.-55 เม.ย.-55 ก.ค.-55 ต.ค.-55 ม.ค.-56 เม.ย.-56 ก.ค.-56 ต.ค.-56 ม.ค.-57 9,000 8,000 7,000 NGV World Review CNG Volume (ton/day) 6,767 7,998 8,434 9, , , ,595 6,000 5, , ,000 5,000 4,000 4, , ,000 3,000 2, , ,000 2,000 1, ,023 1, ,735 55, ,668 No. of NGVs (Vehicles) Number of NGV stations 55, ,000 0 Feb,

12 Natural Gas Transmission Pipeline PTT NGV Business : Mother Station (M) Three Types of NGV Station 1. Mother Station (M) NGV Stations in Thailand* Mother: 20 stations Conventional: 119 stations Compressor NGV Trailer 2. Daughter Station (D) Daughter: 355 stations 3. Conventional Station (C) Dispenser M-D Distance (km) Transportation Cost** (Baht/kg) Compressor Dispenser Conventional Station (C) Compressor NGV Trailer Dispenser Daughter Station (D) * 15 may 2014 ** At diesel price = 29 Baht/Liter

13 1. Reflect NGV price at the actual cost 2. Direct sale from natural gas pipelines 3. Reduce loss burden by managing NGV Cost

14 PAST Multi Tank Trailer (20, 40 Feet) Capacity 2 3 Tons New CNG Trailer PRESENT Jumbo Tube: 5.4 Tons Neo Gas: 4 Tons Long Tube: 4.3 Tons Northern Line to Nakhon Sawan: 250 km Expanding NG pipeline Solution to high CNG transportation cost LNG Carrying more gas per round of transportation 2 small LNG plants in Thailand 1 st LCNG station in Chiangmai North Eastern Line to Nakhon Ratchasima: 170 km CBG Develop CBG Project from livestock in Northern of Thailand to reduce cost of transportation

15 PTT : TAGNOC Technologically Advanced and Green National Oil Company Support Government Policy on Alternative Energy Value added to Biogas Application Reduce Transportation Cost of NGV to Remote Area CBG Produced near by km Remote NGV Daughter Station km NGV Mother Station

16 CBG Business Chain 16

17 Swine Waste Water 0.2 m 3 Cattle Palm Oil Waste Water 0.2 m 3 Waste Water 0.06 m 3 Biogas 1 Nm3 Starch Waste Water 0.17 m 3 1 Nm 3 of Raw 55% CH kg of 88% CH 4 Source: Department of Alternative Energy Development and Efficiency

18 1 Nm 3 >>> 0.5 kg CBG Potential Biogas 2,935 mil Nm 3 CBG mil tons Existing Biogas 577 mil Nm 3 CBG mil tons Source: Journal of Sustainable Energy & Environment Special Issue (2011) p.63-65

19 1.5 MHA 0.72 MHA At least 35 Biogas Plants were identified as a high potential source for CBG With a production of more than 12,000 Nm 3 of raw biogas/day Mainly in Palm Oil and Tapioca Starch Industry Source: Energy Research Institute Chulalongkorn University

20 Size based on volume to supply electricity 1MW Assump tion CBG Cost Agricultural Waste Raw Material Reactor Digester Biogas cost compare with profit from selling electricity Biogas 12,000 m3/d Electricity 1 MW Generator Investment 30 MB O&M 0.35 baht/kwh Project Life 15 Years Processing Plant Upgrader & Compressor Upgrading Technology with compressor 5MB, invest WS 75 MB : 3.89b/kg, O&M 3MB/y: 3.37b/kg CNG Station Exclude municipal tax, Margin New daughter 2.29 baht/kg Element Vat7% CU RTI Processing Plant with comp. CBG Transport Can be pipeline : 0.8MB/1km and truck : 1.17b/kg xkm x Km Supplier/CU Truck transport x Km CU vat Diff Processing Plant w/o comp. P/L transport vat 20

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23 Quick win! With some optimization on operating condition,based on existing technology, to match with Thailand s NG specification Easy to operate with no chemical required Basic fundamental of Absorption New reactor type to replace conventional packed column Reduce the size 1/3 Chemical Scrubber Membrane Contactor Water Scrubber Higher selectivity Preparation for future regulation which might be more stringent on both product specification and emission

24 - Design of Biogas Upgrading Unit based on Water Scrubber Technology has been developed - FEED Study has been done to estimate the cost (plant capacity, 3 Tons of CBG/day) - Issuing equipment specification & vendor list - Develop operating manual Section Cost (Million Baht) TOTAL DIRECT COST Overhead & Profit (10%) 1.56 TOTAL DIRECT + INDIRECT COST VAT (7%) 1.20 GRAND TOTAL NPV PMT Processing Cost Million Baht Million Baht 6.06 Baht/kg CBG

25 CBG Project in Remote Area

26 Objectives: 1. Introducing Compressed Bio-methane Gas (CBG) as Alternative Fuel to Remote Area 2. Reducing NGV Operating Cost Collaborates with UAC Global (Public) Co., Ltd. Raw Materials 34,000 Swine Farm Wet Swine Manure 65 TPD Crushed Fresh Napier Grass 6-15 TPD Amount of Raw Biogas Produced 11,000 Nm3/d Amount of CBG Produced 6.5 TPD Project Duration 15 Years Start Commercial Phase: August

27 Business Model Raw Material Anaerobic Digester Biogas Upgrading Unit High Pressure Compressor ( bar) CBG Ground Storage UAC Global (Public) Co., Ltd. NGV Service Station CBG / CNG Truck Trailer PTT 27

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29 CBG Plant 50 km 380 km Lankrabue NGV Mother Station

30 Current Project Status Accumulated 29,480 kg of CBG Transported to NGV Service Station until Now The Quality of CBG Produced has been Complied with Natural Gas Vehicle (NGV) Specification for NGV, issued by Department of Energy Business, Ministry of Energy Main Problem/Obstacle Waste management Raw material supply shortage Equipment breakdown (Anaerobic Digester Tanks) 30

31 Project Overview : TRC proposed to sell CBG that will be produced from palm oil mill plant waste water to PTT at minimum amount of 6.25 TPD, 300 days per year. Palm oil mill plant owned by Palm Power Green Co., Ltd. located in Prachuap Khiri Khan Province. CBG plant will be constructed, operated and maintenance by TRC and located the area of palm oil mill plant. Treated biogas will be compressed to PTT s truck trailer and transported to NGV station located in the area nearby the CBG plant. Palm Oil Mill Plant Project purpose : Increasing NGV supply and Introducing CBG as Alternative Fuel to Remote Area Reducing NGV Operating Cost, Especially Transportation Cost At Present, CBG Sales Agreement have been being developed by PTT together with TRC.

32 Palm Power Green Co., Ltd. Palm Oil Plantation Palm Oil Mill Plant Palm Oil Product waste water Anaerobic Digester

33 Palm Power Green Co., Ltd. Palm Oil Plantation Palm Oil Mill Plant Palm Oil Product waste water TRC Engineering & Construction Co., Ltd. Raw Biogas Biogas upgrading CBG compressor Anaerobic Digester

34 Palm Power Green Co., Ltd. Palm Oil Plantation Palm Oil Mill Plant Palm Oil Product waste water TRC Engineering & Construction Co., Ltd. Raw Biogas Biogas upgrading CBG compressor Anaerobic Digester PTT CBG NGV Station CNG Trailer

35 Ratchaburi Mother Station 1 st NGV Station 2 nd NGV Station 1 st NGV Station 2 nd NGV Station Palm Oil Mill Plant Palm Power Green Co. Ltd. (CBG Plant) 35

36 NGV Station Plam Power Green Co. Ltd.

37 CBG Plant Cost Elements : CBG Price Transportation Cost Ratchaburi NGV Mother Station Cost Elements : Natural Gas Cost NGV Service Station in Prachaup Khiri Khan Province Mother Station Investment & Operating Cost Transportation Cost

38 Local Benefit Country Benefit Gov t Support Encourage local cooperative and increase self-sufficiency for local consumption Have option for alternative fuel Encourage local awareness of renewable energy Reflect realistic cost enable project feasibility (competitive market) Private sector has opportunity to invest in CBG business chain Opportunity for potential local to reduce their cost of fuel Support growing demand for renewable energy for National security of supply Issue financial privileges for private sector (e.g. tax incentive, subsidy, and etc) Agricultural land mgt. / crop for energy & food mgt. Provide educational and technical support R&D in CBG to accomplish most efficient methodology 38

39 Conclusion 39

40 CBG is potential product but it can t compete with other conventional transportation fuels (Diesel and NGV). To promote CBG, government shall support in both policy and funding. R&D of biogas upgrading technology should be promoted to reduce the upgrading cost. CBG plant should be located next to the NGV/CBG service station or public highway to reduce the transportation cost. Seasoning of the agricultural product will threatening CBG business.

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42 CBG Quality Compared with CNG and European Bio-methane Specs. No Parameter CBG Sample1 Sample2 Sample3 average Compliance CNG Spec. Sweden Spec. Netherland Spec. 1 Wobbe Index (MJ/m 3 ) Hydrocarbon dew kpa ( C) 3 Water dew kpa ( C) < 15.5 < Methane Number CO 2 (%vol) H 2 S (mg/m 3 ) < 0.4 < 0.4 < 0.4 < < 5 7 Total sulfur (mg/m 3 ) <1 ppmv <1 ppmv <1 ppmv <1 ppmv 50 < 23 < 45 8 H 2 (%vol) < 0.01 < 0.01 < 0.01 < < 12 9 O 2 (%vol) < 1 < NH 3 (mg/m 3 ) < 0.14 < 0.14 < 0.14 < 0.14 < 20 < 3 11 Total Cl (mg/m 3 ) < 3 < 3 < 3 < 3 < Total F (mg/m 3 ) < 3 < 3 < 3 < 3 < Mercaptan Sulfur(mg/m 3 ) < 1.5 < 1.5 < 1.5 < < Total Si (ppmv) <1 mg/m3 <1 mg/m3 <1 mg/m3 < 1 mg/m3 15 Hg (µg/m 3 ) < 5 16 VOCs (ppmv) <1 <1 <1 <1 < Dust (mg/m3) < 2 < 2 < 2 < 2

43 Supply 5,082 MMSCFD 1. Domestic 80% Production/ Transportation Natural Gas Pipeline System Application 1. Electricity (59%) Gulf of Thailand (76%) 2. Petrochemical & LPG (20%) On-shore fields (4%) 2. Import 20% 3. Industry (14%) Myanmar (18%) 4. Transportation /NGV (7%) LNG (2%) Source : Energy Statistics, Energy Planning and Office, Ministry of Energy, Thailand (As of Sept, 2013) 43

44 CBG Plant Cost Elements : CBG Price Transportation Cost Ratchaburi NGV Mother Station Cost Elements : Natural Gas Cost NGV Service Station in Prachaup Khiri Khan Province Mother Station Investment & Operating Cost Transportation Cost Cost Saving 2-3 Baht/kg or Million Baht/Year

45 Opportunity cost of biogas is the selling electricity produced from biogas NPV of electricity selling Net Profit = NPV of Raw Biogas Selling Raw Biogas 1Nm 3 Generator (η 38%) Electricity kw NPV Raw Biogas 1Nm 3 Biogas Price Need to be competitive 45

46 Pre Economic Assumption Assessment Project Life: 15 years Discount Rate: 10 % Plant Availability: 300 days/year Electricity Cost: 3.5 Baht/kWh Water Cost: 10 Baht/Nm3 Year Investment Operating Expense Maintenance TOTAL NPV PMT Processing Cost Million Baht Million Baht 6.06 Baht/kg CBG

47 CBG is potential product but its cost is still high and difficult to compete with other conventional transportation fuels (Diesel and NGV) that the price have been regulated. To promote CBG as an Alternative Fuel in transportation sector, government shall support in both policy making and funding such as lower tax or tax exemption, financial support in investment and adder etc. Local research and development of biogas upgrading technology should be promoted to reduce the upgrading cost. Source of raw materials and CBG plant should be located next to the NGV/CBG service station or public highway to reduce the transportation cost. Main obstacle in biogas from agricultural waste development to CBG is agricultural products such as palm, tapioca, sugar cane etc. have the harvesting season.